Section 106 and CIL in England: modelling obligations and payment triggers

Start with the authority and the permission

For an illustrative scheme in Leeds, start with the council’s adopted charging schedule and its published instalments policy. Confirm the charging zone, permitted use, chargeable floorspace and relevant indexation before inserting a rate. An old schedule PDF alone does not establish the payable amount for a new permission.

Record Section 106 obligations from the signed agreement, including index definitions, occupation thresholds, monitoring costs and any conditions. CIL guidance and planning-obligation guidance describe different mechanisms; a single percentage allowance conceals both their calculation and their timing.

Sources: Leeds City Council: Community Infrastructure Levy adoption; Ministry of Housing, Communities and Local Government: Community Infrastructure Levy; Ministry of Housing, Communities and Local Government: Planning obligations

Turn the documents into payment lines

Assume a fictional project has a confirmed £240,000 CIL liability and an agreed £360,000 education contribution. For this example only, the CIL is paid in two equal instalments in months 1 and 7, while the contribution is due in month 10. These dates are assumptions, not Leeds’ published instalment rules.

Link occupation triggers to the sales programme

If the education contribution becomes payable before the twentieth occupation, its date should follow the occupation schedule. Moving the twentieth handover into month 6 moves £360,000 forward by four months. Holding every other cashflow constant, that increases funding required in months 6 to 9 by £360,000.

At an illustrative 8% simple annual bridge rate, four months of extra borrowing costs £9,600. That is an incremental timing cost, not an increase in the underlying contribution.

Model relief as a documented condition

Show a gross liability, separately identified relief and the resulting payable amount. Record application status, commencement requirements and events that could withdraw relief. Do not treat an expected exemption as cash already saved.

Where an existing building deduction is proposed, retain the floor-area and lawful-use evidence supporting it. If the authority’s calculation differs, reconcile the difference before using the model for a land bid.

Sources: Ministry of Housing, Communities and Local Government: Community Infrastructure Levy

Give the delivery team a payment register

The final register should name the person responsible for notices, the source document, the trigger, expected date and funding source. Review it whenever permission, phasing or occupation changes.

A cost consultant can reconcile the allowance, but the planning and legal advisers must confirm the actual obligations. The modelling test is whether every amount and trigger in the operative documents reaches the cashflow once.